tv Trending Business Bloomberg June 29, 2015 10:00pm-11:01pm EDT
believe irresponsible rumors. and alexis tsipras saying the eu doesn't have the nerve to throw his country out of the eu. the prime and esther saying that europe needs grace. rebounding, generally speaking. indonesia just getting in on the action. will be live in jakarta later. let a look at what is the last trading day of the first half of the year. >> we are still seeing that volatility continue in china. officially still in bear territory after we saw yesterday. down by more than 22 from a high on june. the asian markets are rising from those three-month lows
after closing yesterday at their lowest level since march 17. in japan, the nikkei currently up by 0.3%. volatility easing their. the australian share market is pretty flat the moment. we did have big falls in base metals. and the exchange has dropped by 3.5% this morning. that is having an impact as well as you would expect on the shanghai market. a quick look at what is moving the chinese market and where certainly seeing some weakness coming through in those basic materials. financial stocks looking quite good at the moment. volatility is continuing in china but the risk of asia has put some of those greece concerns to rest. rishaad: to greece. people waking up in the next
couple hours, day two of their reality as their life savings are out of reach, stuck in the banks are prevented from leaving the country. there is an imf payment in the prime minister's daring his country to throw them out of the common currency. first point, greece has shut down speculation that they weren't reducing the euro limit to 20 daily. that is not true it is still 60. they downgraded their ratings on greek banks to restricted default. most of the concern and expectations can, will and should be able to bring in any kind of follow. from alexisnts tsipras exuding confidence that
the rest of europe knows better than to kick greece out. >> greece has made an ultimatum including terms and conditions that do not abide by the mutual respect defined by the european framework. just a few other things, $1.7 billionhe imf which the prime minister says they will not be paying. second the finance minister was getting mobbed behind me by reporters telling the telegraph newspaper that greece is considering turning to the court of justice should the need arise. arguing that they made no provision for a euro exit. not what we saw across the bond market overnight. the widening of the spread with
the german tenure bond -- they are crisp -- perceived to be vulnerable. as some people would like to call it. 239, -235, -80 there it that is the spread. how high the high yields will get. 2011re near the levels of when things were spiraling out of control. there were north of 7% at that point. back to you. chinese looking at the what othert again, tools do they have? >> this is the stickiest --
steepest stock market route since 1996. it is hard to believe but that is certainly the case. we had an magnificent run up. territory.to bear 3.4% drop in the basis. pboc,ntral government and expected to stem this decline even with target intervention and interest rate cuts. many in the market say that is the likely scenario given that it will take some time for monetary policy and fiscal policy changes to coincide with stock market stabilization. one of the key challenges is the underlying economic growth is not there. you had this big run-up. you can see a significant dislocation. , the pbocother things
and the central bank governor could do to save the market -- stabilize the market is he could halt initial public offerings and encourage insurers to buy shares. he could basically cut off the taps to the ordinary investors who have run up the market and you could cut lending rates outright. our economists at bloomberg predict that is what they will likely do. expect theonomists central bank to take another rate cut but it may not come as soon as some would like to see happen. rishaad: a look at that story later on in the program. do tweet us your thoughts. roundup.n with the and a clock is ticking negotiator has left talks in vienna.
say sharif hads gone home for further instructions. all sanctions removed as soon as the deal was done. it is frozen out of the international financial system. it has been wound down for favors. we will keep you updated with further development. , meantime and they are winners as microsoft sharpens its focus. uber is acquiring a portion of microsoft matching units. we will offer jobs to about 100 microsoft employees. that is part of the mapping team. a site nearludes
boulder, colorado and a license to certain intellectual property rights. work it will continue to with companies like google, apple and others to provide maps. it is pulling back its web display advertising and headed straight to the cloud with a continued deal with aol that will take over management and sales with the global advertising what form. employeesmicrosoft go, there are 1200 jobs in question affected by people close to the deal. wants to focus its strategy and business on personal computing. for aol, they will be taking
over the management and sales for all of microsoft display, mobile and video advertising, globally from the u.k. to the u.s. to spain and japan. spending money for the japanese arena has fallen to its lowest in 33 years. it is fallen to $306 a month, down 5% from last year. it comes from the make -- the bank which has been tracking allowances since 1979. theand allowances are often first to be hit in the last recover. the overall consumer prices rose 2.5%. up they simply haven't kept with the rise in losing -- living cost. rishaad: roundup on bloomberg
business, how a growing middle class means the number of vietnamese -- the started downsizing. bloomberg.com. later in the program, indonesia sent for of bond market slump. headed to jakarta for the details. after this short break, winners and losers. a look at how currency markets are responding to the greek debt crisis. ♪
iran was on sections removed as soon as a deal is done and washington allies say it must be loud down in stages. president obama has and i could two measures which case you wait for the trade agreement. call that a true is an achievement is inside the bills into law. one of them announcing fast-track authority can negotiate trade deals which means congress will have a simple yes or no decision to make once the package is completed. one person has died from injuries suffered in a fire in taiwan over the weekend. of her taken off life's with her family's consent. more than 400 people remained hospitalized. investigators are focusing on the possibility that a cigarette but or i saw ignited, powder sprayed into the crowd. easing: the euro may the
off of monday's gains but it is still heading towards the quarter the game in two years. you. great to see has it surprise you that the euro is an quite as resilient as it has been, given that europe and greece are in crisis? guest: it is interesting that the euro has held onto these levels. you would've expected a much bigger debt but the reality is that investors are still very much sidelined. there is not a lot of interest in buying or selling euro at the moment. whether there is a grexit are not whether the referendum is a yes or no, what happens to greek banks? so many questions still to be answered. the reality is that investors are waiting to see what happens. we still expect the euro lower in the coming months looking for
a move to parity as you go into your end. we're not saying much movement either side. rishaad: will it be the actions of the fed or within the eurozone itself? guest: the reality for us is that it is a bit of both. the fed will hike rates in september, potentially once more by the end of the year and u.s. growth is already rebounding and we are expecting a pretty good payroll number at the end of this week. andnger numbers in the u.s. other growth with higher interest rates and in europe we still have the ecb which will have full-blown qe. in that sense there are signs of recovery in europe but it is a long way before a full recovery so that still suggests to us that the dollar will fare worse than the euro. greece, even though
it is a tiny fraction is grabbing all of the headlines. you think there is sort of a sense that people were looking at it not believing that it could get to this stage you go -- stage? guest: that is probably a fair assessment. there has been so much talk in recent months that the european institutions have put in very significant safeguards, even if greece does exit the eurozone at the rest of greece will not suffer and the periphery will be well insulated. there have been some strong buffers but we still expect some contagion so greece could be in the works here. if greece does exit. if greece doesn't exit, the it has been kicked down the road. the greece economy is under a lot of pressure.
and there are a lot of payments in july that need to be made so see a nears is if we positive outcome. former cio ofthe pimco, he said yesterday that he saw the possibility of a grexit of greece leaving the euro area at 85%. what is your view? guest: that seems rather high. clearly at the moment it is up in the air. in reality that does seem pretty significant. there is still a push to get a deal done in europe and if this -- this referendum is a know there is a chance that the government in greece could be forced out in the could be new elections in a different situation entirely. yes that would
support there is a lot of support toured europe. it's not that they want to leave but the question is how much austerity can they bear. at this stage it is still very much up in the air. the thing is, we look at what is going on in the fx overts, how does it spill into the rest of the currency universe? back to risky currencies. the dollar again remains a safe haven and it will benefit in a market of higher risk aversion. interventionk of by the smb yesterday so obviously there is some prevention but on the other end of the scale you do have a high
they afraid what they are going to do with their money. if they have money for five days or more. >> next week we will be paid by the government so if we are not all pharmacies will be affected. next week we don't know if we are in europe or not. but he will have the money to pay. >> last night there was in general a fewer amount of tourists. the problemays seems to be worse and worse. feeling i have seen is that we have the same amount of tourists.
the tourists have credit cards and all the facilities and everything prepaid. they can use it for any amount, but not us. we are afraid for everything. tomorrow. so sure for all the greek people love .his country i want to see the sun every day better. please europe people. help greece. .elp the greek people
rishaad: events in greece sending shivers. as in china we have another decline of 5% for the shanghai composite. .he volatility continuing that means one quarter of the market cap has been wiped by the shanghai composite. yesterday we saw the shanghai composite enter the bear market -- market. here managing put in a bit of again, 0.1% or it we have indexed futures on the way up and the interest global selloff since 2013.
we do have at the moment about $1.5 trillion yesterday. greece is short-circuiting bailout talks by calling that referendum on creditor man. a bit of again in the strait times index. a good performer there. 8/10 of 1%. bonilla and kuala lumpur headed in opposite directions. the euro has strength but has been giving up some of those gains. after the break we take a look at the effect on emerging markets. ♪
a member of the ecb board sing greece could still remain a member of the common currency. talks to prevent iran from building a nuclear weapon are on hold. the issue suggested to remain a major hurdle for the country. with indicate to 25 closing out -- with nikkei to 25 closing out. the market closing with one glaring exception. >> the shanghai composite seems to have its mind down in early trade. from look at that down 25% the peak, that is about $2 trillion. 18% since is down
wednesday. volatility of course and we kept seeing a shanghai composite move and continuing to sell down by 3.7%. that has blocked out some of the gains that we have seen elsewhere and the nikkei up only by 1.1% where we are seeing a little bit of movement coming through in some of those consumer stocks. banks under a little bit of pressure and also some of those textiles coming under a little bit of pressure in japan. in australia that should've been the last day of the financial year. what they call a window dressing later on in the days trade. the s&p 600 is pretty lacs. stocks are a little bit higher but everyone is still
focusing on the volatility. rishaad: that's what we're talking about. the wild ride for the mainland markets. me -- canna is with me. everyone thought this would happen at one point but it is seeming to happen quicker than we predicted. >> we are seeing china extending its losses but it hasn't had as aimpact on the market leverage investors headed out the door. talking about the chinese reaction to all this, and reverse rates as well? chinese government has had more measures to stop the drop. there was a report they were considering stopping that stem tax and are considering to suspend ipos to control the supply side. rishaad: it is sort of dangerous
for a central bank to get involved with equity trading. guest: analysts are obviously divided. the chinese government will continue to do whatever they can to support the market because it is in their own interest. probablythose measures will not have much impact. clear lines between the bulls and the bears. the latest with the chinese markets. the other story is all greece. the driving force of the markets as of late. our chief agent economic correspondent with a look at how greece -- some are saying this is the lehman moment for emerging markets. it probably isn't, is it? guest: it is a different scenario but there is also a
fear of complacency. as one person put it it is the fear of a black swan event. mostifferences are that are conditioned for some kind of a greek crisis. has put together a lot of offers that were not there a few years ago. people think that the greek crisis can be contained, but what if it isn't? rishaad: what is a black swan event and are we being complacent about it? worryhink that is a especially among emerging markets. they are going to this greek crisis with half the pace of growth. that is why asian risks took over the engine of growth. the risks are, if it spreads beyond greece and into spain and italy, than it exports and hits trade through asia. asian growth is already slow. they don't need another crisis.
the realhere it hits economy and becomes a problem in asia. rishaad: what markets are the most multiple here? -- are the most vulnerable here? >> malaysia and indonesia. not a great spot to be when you're domestic currency is sinking, the u.s. dollar is rising, interest rates are rising. companies cannot pay back service or interest, they don't invest, spend or cut staff. throw in exports to europe and you could have a bad situation there. called the regional sin complex. rishaad: black swan. regional sin. we've got it all. you can get more on this story any time, anywhere just download bloombergerg cap -- app.
a look at some of the other stories, a debt crisis bubbling up. rico saying itto cannot pay its debt and it needs major restructuring. 60% of puerto rico's upcoming $10 billion budget is in off of a debt repayment and an unemployment rate which is twice the u.s. average. has failed to boost its currency holdings. reserves need to be raised by at least 13% to withstand global volatility. the banks say that india needs more than 400. toyota accelerating plans to fiatyet for a -- fight -- for a midsized sports car.
we have not been told where the cart will be built and when production might start. they are also involved in fuel-cell technology. foreign investors have been snatching up indonesian debt but some don't think that is sustainable. let's get to jakarta as we are joined by bloomberg's tv, olivia tell us more. olivia: foreign investors are snapping up indonesian at a record pace. as much as 1.3 billion u.s. dollars was pumped in last week, the highest since 2003. the yield premium averaging more than six percentage points -- points is still seen as the main pulling factor for investors. -- investorseive still hold a significant portion
of the local currency bonds. compared to 31% in malaysia and 17% in thailand. there are signs out there for a potential bond market slump. the accelerating inflation, slowing economic growth. inflation predicted to accelerate to 7.15% in may leading the bank it indonesia to cut borrowing costs. country is facing a big challenge as the fed moves closer to raising interest rates. a recent profile may explain why many investors are there for the long term. according to the imf that gdp ratio has fallen while the foreign exchange revert -- reserve reached 110.8 billion
agreement approaches you may be in for more of the same. iran wants crippling economic sanctions scrapped. world powers say that can only happen once inspectors from the agency verify that iran is keeping its word. to do that the iaea will need free reign in the nuclear facilities and access to other places of interest. some iranian military -- a militaryeaders say sites will be off-limits. secretary of state john kerry appeared to downplay earlier this month. if a deal is done, congress would have 30 days to review it but this could be subject to delays. and two years of talks, nuclear negotiators have never once met
their self-imposed deadlines. so if the deadline comes and goes without a deal, don't despair. our international correspondent is that these toxins as a deal could be brokered within days. upthe two sides have come with a plan for phasing in the deal if they finally agree on the points that make up the element of this text. but first there will be the agreement itself and it is period where a run takes voluntary steps to curb its nuclear program while at the u.s. and the eu tour card on all of the top located -- eu work top issues.of the they have -- once they have verified that they have made those changes, at that moment
sanctions relief would kick in. an egyptian court will issue its final verdict in the retrial of three al jazeera charges. -- journalists on terrorism charges. beingere charged with among a terrorist group and charge with erring falsified footage to damage national security. were given 10 years each before the highest courts ordered a retrial. afterexecutives in france rival taxidriver staged a protest. that it is acting illegally in france arguing that courts have consistently refused to block its business. they mustollande says be dismantled and declared illegal in france. donald trump has been dropped by nbc after he derided mexican immigrants as racist and drug
dealers as he launched his white house campaign. networks as they will not air the miss usa and miss universe pageants. they join univision and canceling the broadcasts. trump has threatened legal action. getting back to what is happening, greece is dominating markets across the world. handing the s&p 500 the worst day it has had this year. there is this from new york. for the u.s. markets it was an ugly close. wiping out all gains for 2015 so far. as treasuries really took off, the yen and gold also higher as investors focus on safe haven or safe asset plays. banks are leading the way lower among the big players. morgan stanley down 3%.
j.p. morgan chase down 2%. bank of america down 2.5%. all of these banks have reduced their collective exposure to greek sovereign and financial debt. they have taken it down to $2 billion from 3.7 billion in the last two years. fedhead of the new york calls greece a huge wildcard. if it goes badly, he says, we could see a much bigger market effect in the u.s. than anyone is talking about. if you talk to jeremy siegler he has a different view on what effect greece could have. >> it is not going to affect the long run. even for europe, 1.6% of the eu economy. it is not going to be essential for a long run situation, unless you thought it would be the
inference of a general breakup for a major currency. i don't think it will happen. >> a gauge of stock volatility has surged throughout the world as investors are focusing on whether they take risk or whether they don't. up some 35%. that is the biggest move in two years. looking at oil speculators, they are the least bullish on crude in 10 weeks. we go back to these nuclear talks with iran. is reached itt could further increase the global supply with the run promising double exports if sanctions are lifted. u.s. production closes in on a record. itsosoft is shutting down web display advertiser business as they hand over ad operations
$1.7 billion today. do in 24 hours. this guy in the u.k. started a crowd funding greek bailout. it is a screenshot. he has raised about 10,000 euros. we are still a bit off. >> a little ways to go. >> i think he can go get a rolex. euros -- let three me get my notes. euros, it gets you a postcard from mr. tsipras. six euros you get salad. 10 you get a small bottle of wine. 25 you get a bottle of greek wine as well but you have to pay for shipping. so obviously everyone is trying to do their part. >> one not? -- why not? >> i am looking at donald trump
again. i know it is a bit of deja vu but you have to be careful what you say. dumped donald trump. they will not air mr. harris or miss usa and this is halloween last week's decision -- miss universe or miss usa and this is following last week's decision. trump says i will sue because we have deals and partnerships. he has even taken to instagram to defend himself. stems from the comments he made during his campaign announcement had a presidency saying that mexican immigrants are drug dealers and rapists. he is saying that has been taken out of context and he was worried about the borders. >> taken out of context? those are his direct words. >> innocent people are not saying that i love mexico.
but if you run for president people will hold you accountable. and they are. if you take a look there is an online forum which has 700,000 signatures announcer: i must -- . i must say that moveon.org started a couple years ago against trump and now they're calling on macy's to dump trump. there's also a merchandising partner. they have 700,000 signatures but a lot of those have just been generated in the last few minutes as the backlash builds. >> every now and then we read people who get into trouble. regular people. for posting -- >> you cannot just say whatever you like. trump willng donald know how powerful mexicans are, when you insult one member of
the nation you insult us all. >> running for president. >> back to you. rishaad: the biggest loser on index.ia's nse let's find out more and get to mom by. -- mumbai. what is wrong with the company? >> it is a warning coming in the i.t. industry being issued closely on the heels of a disastrous earnings we saw in the three months from march. of adding growth with adequate control of operations. is the third i.t. company issuing a warning for the third quarter saying it will see weaknesses for the first two quarters driven by weakness in the telecom business and also visas which is something that another i.t. company has
indicated it would see regrowth in. i spoke with the manager yesterday and he said they would see and take all cost measures during the quarter to try to keep costs down. the sense i got from the interview is that all bets are on the table at this point. is this reflective of what the rest of the industry is feeling here? i've spoken with analysts that this week and look is being -- this w -- ice week eak outlook is being restricted. the dollar revenue guide into the air. back to you. rishaad: thank you for that. that is in mom by. -- mumbai. that does it for this tuesday edition of "trending business,"
al: i'm al hunt. john: and i'm john heilemann. and with all due respect to donald trump, this time you are -- eh, too easy. ♪ john: happy national waffle iron day, sports fans. who is the most interesting man in the world today? it could be joe biden and it could be donald trump. let's start with two new candidates.